All posts tagged africa-petroleum

Egypt’s Zohr field, discovered by ENI in 2015, is now producing 2Billion standard cubic feet per day (2Bscf/d), “equivalent to approximately 365,000 BOEPD, according to the Italian explorer. “This outstanding result has been achieved only a few months after the first gas in December 2017 and one year before the schedule of the Plan of Development (PoD)”, the company gushes, in a release.

“This level of production was achieved thanks to the start-up of the fifth production unit (T4), backed by the eight gas producers and a new 30” x 218 km sealine, commissioned August 2018 and confirms the programme pursued by ENI, its partner, Egyptian Natural Gas Holding Company (EGAS) and their joint venture company Petrobel aimed to reach a plateau in excess of 2.7Bscf/d in 2019”.

ENI boasts even moe: “The latest achievement reinforces the exceptional development path of the Zohr project, one of ENI’s seven record-breaking projects, which is playing a fundamental role in supporting Egypt’s independence from LNG imports”.

The Zohr field, the largest gas discovery ever made in Egypt and in the Mediterranean Sea with more than 30 Tcf of gas in place, is located within the offshore Shorouk Block (some 190 km north of Port Said). In the Shorouk Block, ENI holds a 50% stake, Rosneft 30%, BP 10% and Mubadala Petroleum 10% of the Contractor’s Share (where Eni, Rosneft, BP and Mubadala Petroleum are collectivity the Contractor).

The project is executed by Petrobel, the Operating Company jointly held by ENI and the state corporation Egyptian General Petroleum Corporation (EGPC), on behalf of Petroshorouk, jointly held by Contractor (EN and its partners) and the state company Egyptian Natural Gas holding Company (EGAS).

Savannah Petroleum has moved the GW 215 Rig to drill the fifth well in its exploration campaign in the Niger Republic.

Zomo-1, spudded on September 8, follows Bushiya-1, Amdigh-1 Kunama-1 and Eridal-1, all drilled by the British explorer between March and August 2018, and all of which encountered crude oil bearing zones, considered by Savannah to be of commercial size.

But none of the wells have been tested, so there is no clear handle on flow assurance.

As with others, Zomo-1 is located in the R3/R4 PSC Area in the Agadem Basin, south east of the republic of Niger. It is also, as with the rest, designed to evaluate potential oil pay in the Eocene Sokor Alternances as the primary target.

The well is planned to be drilled to a total depth of 2,438metres Drilling is expected to take between 30 and 35 days.

The Company plans to log all prospective sections within the well, with further logging employed for hydrocarbon bearing sections. “In the success case, the well will be suspended for future re-entry and further evaluation, which could include well testing”, the company says.

Officials in the Nigerian Ministry of Petroleum Resources are aware that the Anglo Dutch major Shell is inclined to divest from several of the 17 onshore acreages it asked the government to renew.

But they have gone ahead to renew most of the licences anyway, because they think it is unlawful not to do so. The extant licences on the acreages were due to expire in 2019.

“By the regulations we are working with, all these assets we have renewed deserve to be renewed”, Ministry sources categorically tell Africa Oil+Gas Report.

“Shell can take us to court if we don’t renew”, say ranking government officials in the Ministry, who also argue that, with state sponsored bid rounds not having happened in the country in the last 11 years, the frequent Shell lease divestments since 2008 “have benefited Nigerian companies”, who have purchased the stakes belonging to Shell and other international companies in these assets.

As it is, even during the process of renewal between late 2017 and mid-2018, Shell was actively negotiating on the side, with several parties, its divestment from three of the acreages in the renewal basket: Oil Mining Leases (OMLs) 11, 17 and 25.

Shell was asked to pay $820Million for renewal of 14 of the 17 acreages it sought to renew, including OML 25, an acreage that Shell had put in a divestment round in 2014, but failed to sell because of a last minute NNPC invocation of its right of first refusal. Shell, NNPC and several parties have been involved in closing that transaction since that time.

Regarding OML 11 and 17, Shell has, for a while, been negotiating with buyers and has put a $1.2Billion invoice on the table.

It would seem that such asset should not have been renewed, since Shell had demonstrated that it was going to sell them. It would, ordinarily appear intriguing, that the state would renew the licence of an acreage to a company that had clearly shown it no longer wanted it.

Why don’t you put it in a bid basket so that the state gets the benefit of the licencing?, we asked.

But MoPR officials say that Shell has paid all it needed to pay on every asset in the 30 years since they were last renewed and had extensive work programme on each of the acreages, so it would have been illegal to say no to renewal.

Out of the 17 onshore acreages Shell submitted for renewal in late 2017, only three were revoked, at the provisional conclusion of the process in February 2018, “for lack of enough work done over the last 10 years”.

OMLs 31, 33 and 36 were denied approval, while the government decided to cut OML 11 into three because it was too large. But Shell has contested the decision on OML 11, arguing that “the proposal would unduly punish” the company, which had conducted operations in the asset “legally and in full compliance with the law”.

Anglo Dutch major Shell is keen on purchasing the operator stake in Angola’s Blocks 21/09 and 20/11, two very prospective acreages in the deepwater Kwanza Basin. These are the assets that Cobalt Energy, the US minnow, operated in the country until 2015, when it sought to sell its 40% stake in them to Sonangol, the state hydrocarbon company, for $1.75Billion.

That transaction fell apart in 2016, and Cobalt took Sonangol to international arbitration over its failure to extend the licence deadlines. The two companies reached a settlement-Sonangol reported in December 2017- which called for Sonangol paying $150Million by February 23, 2018 and a further $350Million by July 1, 2018.

Sonangol has now put up, for auction, Cobalt’s 40% stake and operatorship of these assets.

Observers see Shell’s interest in the blocks as a way of re-entering the country. Cobalt’s 2016 annual report indicated that it made seven discoveries in the blocks with a total of 750Million gross barrels of oil equivalent. A significant part of the volume is natural gas, the hydrocarbon fluid type that Shell is most interested in trading with.

Shell went to Sonangol’s data showroom in Houston on early June 2018, with a delegation of about a dozen officials and the company was widely speculated as the leading contender for the assets.

Shell was one of the earliest entrants into the deepwater activity in Angola between the early and late 1990s. Its Bengo-1 well, drilled in Block 16, tested 1,780BOPD in one reservoir, the first discovery in deepwater Angola. The company’s initial enthusiasm about the structure was restrained by the well’s high gas cap and pancake thin reservoirs, but Shell was willing to risk an early production. The enthusiasm waned when Bengo-2 turned out to miss even the thin bed that was of such fascinating interest in Bengo-1. Then the more it drilled, the less fortunate the company got. Whereas other operators: TOTAL, Chevron, ExxonMobil, even BP, went on to make discovery after giant discovery, Shell got trapped in a run of ill luck, drilling nine wells in Block 16, most with marginal results. This is curious, because Block 16 is located between the two most successful leases in the country: ExxonMobil’s Block 15 to the north and TOTAL’s Block 17 to the south. The last well Shell drilled in Block 16 was Chiluango-1 which was abandoned in early November 1998 as a dry well. In 1999, the company packed out of Angola and shifted its gaze to Nigeria where, by 1996, it had become sure of the deliverability of its huge Bonga structure, located in the upper slope of the deepwater Niger Delta.

Austin Avuru, Chief Executive of Seplat, Africa’s largest homegrown E&P firm, most vividly remembers the day the company lost the bid for Oil Mining Lease (OML) 29 in eastern Nigeria.

“That was one of our lowest points in this company because the acreage was going to be a company changing asset for us: it was going to give us the size that we seek”, Avuru reflected, in his office in Lagos, Nigeria, recently, as he prepared to celebrate a milestone that ties his own personal growth with Nigeria’s 60 year trajectory as an oil producing nation.

OML 29 is a sprawling, highly valuable property, spanning an area of 983 square kilometres (or 242,550 acres) onshore and holding some 2.2Billion barrels of oil equivalent, in proved and probable (P1+P2) reserves, in nine fields, according to a 2013 Competent Persons Report by NNS .

To put some context to the figures: Seplat, today, produces, on a gross basis, slightly higher than 60,000Barrels of crude oil and condensates and 400Million standard cubic feet of gas from five acreages, whereas OML 29 alone produces over 80,000BOPD, when there is no vandalism of evacuation pipeline.

“We had the cash on the table but we did not win OML 29. We were only a hundred million dollars away from Aiteo’s bid (to Shell, which was leading a divestment of itself, TOTAL and ENI from the tract). It was insignificant because we were talking about a $2.4Billion bid and $100Miilion was less than 5% of that, so it was insignificant”.

Avuru wonders whether the inability of Seplat to clinch OML 29 wasn’t due to “the politics of who Shell figured would more easily get the approval for the purchase” from the Nigerian government. “Otherwise they” (the company which won the asset) “couldn’t pay for one year after they got it, while we were going to write our cheque immediately because we had our money ready”.

It was the loss of OML29 that made such acreages as OMLs 25 and OML 55 important to Seplat, Avuru noted. “All these issues about OML 25 and OML 55 came because we lost the big fish”.

His disappointment about OML 29, Avuru explained, pales in comparison with a particular challenge he had faced when he was building Platform Petroleum, a marginal field operator. This was before he helped bring Platform, Shebah Exploration and M&P together to create Seplat.

“The biggest setback was the day I woke up and found out that cellar of the appraisal development well that we were drilling in Umutu had collapsed. We borrowed $10Miilion to drill that well and supplemented with our cash and in the end, the well cost us $19Million. We borrowed $20Million for the gas processing plant and our production was declining and we couldn’t borrow more. We were almost in the throes of death. This was in 2009 and that was when I scratched my head and thought ‘this is it’. The only thing that came to our aid eventually was the pipeline network that we had built all by ourselves to the cluster”, he recalled, referring to a cluster of four oil fields in the Western Niger Delta, which evacuate their crudes into Platform’s facility. “The Ase River Pipeline was generating about $2Miilion in gross revenue in tariff every year. So that revenue stream was enough to negotiate a revolving credit facility with Skye Bank for $5Million. It was that money that we eventually used to work our way back to life”.

Not all of the huge regrets of Avuru’s life in the last 15 years were business related.

“One of the biggest potholes I have had was the day I lost my wife in 2005 after the two of us had inspected the site where we (Platform Petroleum) were building our flow station in Umutu and so on”.

Avuru remarried, several years later, and then this:

“And then the day I had to open my kitchen door to inform my wife that her 57-year-old father, who had been accidentally shot by a police man and was in the hospital, had died.

“I think those were probably my lowest points in the past 15 years”.

Otherwise, much of the path Avuru had travelled, since he left the NNPC in 1992, had been strewn with gold.

At least, so it seems.

Since he left NNPC as a star geoscientist (by his own account), Avuru had worked for Kase Lawal’s Allied Energy (which became Erin Energy, and has since ceased to be a going concern) and moved on to set up Platform Petroleum, from which platform he became the Chief Executive of Seplat, the only African indigenous E&P Company to be listed on the main board of the London Stock Exchange.

In the last 12 years he had been nominated by two successive Nigerian Ministers of Petroleum for the position of the Director of Petroleum Resources and had come terribly close to being appointed to the position of Group Managing Director of the NNPC, the hugely influential state hydrocarbon company. “I had a one-on-one interview with (President) Yar’Adua”.

To mark his 60th birthday on Friday, August 17, 2018, Seplat Petroleum’s management wove a theme around the fact that Avuru was born in the year that Nigeria first exported crude oil. An industry stakeholders lecture, at a princely venue overlooking the Atlantic, entitled 60 Years After: Preparing For A Nigeria Without Oil, was attended by over 300 people, a glittering gathering featuring the country’s top business brass, C-Suite level petroleum executives, energy bureaucrats and ranking politicians.

Ghana has launched a Petroleum Register in accordance with the provisions of the new Petroleum Exploration and Production Law (Act 919, passed in late 2016).

The Petroleum Register is an online platform (www.ghanapetroleumregister.com) of a Public Register that hosts Petroleum Agreements and contracts ratified by Parliament as well as Petroleum Permits, Certificates, Authorisations, Approvals and Consents.

With Jimmy Mugerwa appointed Country Manager and Grace Kavuma, Finance Manager, both in the last six months, Tullow Oil has largely localized the upper ranks of its Ugandan workforce.

The jobs used to be done by Europeans. Eoin Mekie was the last Country Manager of European origin for Tullow in Uganda. He left the job in November 2012.

Mugerwa and Kavuma come to their jobs with considerable qualification and some see their placement as quite strategic. With Tullow’s completion of the sale of two third of its assets in the Albertine graben to France’s Total and China’s CNOOC — a process that was delayed by a capital tax impasse and negotiations over a stabilization clause — the national conversation is around how Ugandans will benefit from this natural resource.

The government is considering the partners’ plan of development of the Albertine Basin, where Tullow claims there has been 1 Billion Barrels of Oil discovered and there’s potential to find another 800Million barrels. The Ugandan government has been quite vocal about “detailed programme for recruitment and training of Ugandans.

A Bachelor of Science graduate in Agriculture from Makerere University, who holds Masters’ degree in the same course from the University of Wales, and attended an executive business leadership programme in Lausanne, Switzerland, Mugerwa arrived Tullow Oil by way of Shell Kenya of which he was chairman. He had worked at Shell Ghana, South Africa, Uganda and in the Netherlands.

Kavuma, meanwhile, was executive director and chief financial officer at the Development Finance Company of Uganda(DFCU) Bank, a position he held after working at Barclays Bank Uganda and Shell Africa.

Victoria Oil and Gas has announced the appointment of John Scott, 54, as the Chief Executive Officer of the Company, with immediate effect. Scott has undergraduate and post graduate engineering degrees, and initially trained with Royal Dutch Shell before furthering his education with an MBA from the London Business School. He has more than 30 years’ experience of upstream and downstream oil and gas operations both in industry and in energy banking. Scott previously served in technical and senior commercial roles with the British National Oil Company and Halliburton. He has also has held various investment banking roles with Citigroup, Standard Bank and ABN Amro. The new helmsman has extensive corporate finance and transactional experience in West Africa and Russia and has established strong business relationships within these regions. He was a founder of Toronto Venture Exchange-listed Exile Resources Inc, a West African oil and gas exploration company that merged with OandoPlc, a Nigerian oil producer. In Russia, Mr Scott has completed several high profile oil and gas transactions including the acquisition and disposal of gas assets during his time as an energy investment banker and as a Regional Director of Halliburton. Mr Scott joins VOG from Indus Gas Plc (“Indus”), one of the largest oil and gas companies by market capitalisation on the AIM market of the London Stock Exchange.

Jide Ojo, former President of the Nigerian Association Of Petroleum Explorationists (NAPE), has left Addax Petroleum in Nigeria. He was the company’s General Manager for Exploration. At a well attended send forth party for him in a seaside Chinese restaurant in Lagos, he dismissed insinuations that he is a unique species among his generation of Nigerian technical professionals who work for multinationals. Mr Ojo has worked in the industry for 32 years and has moved around, working for Shell, ExxonMobil, Statoil, Global Energy and Addax.

“Perennial Mover?”, he questioned the phrase. “Only five moves in more than 32 years in the industry, with sometimes 6-10 years between moves, ultimately leading to voluntary exit from Addax (albeit three years before retirement age) sounds deliberately focussed/decisive rather than flighty, if you ask me”. He left Addax finally at the end of February 2013 after three more months working on contract as a Consultant. Asked if he was one of several experienced engineers and geologists invited to the company by the late Jim Pearce, Addax’s transformational former CEO, he responded quite formally. “Jeff Schrull’s incorporation of meinto the Addax family certainly had a Jim Pearce handle to it. Jeff was hired as Corporate GM Exploration based in Geneva and his mandate was to move the company further upstream by activating an exploration focus which was mostly non-existent at the time. I was then brought on board close to two years later to build up the corresponding Nigerian Exploration Business Unit”.

Russian operator, Lukoil has promoted GatiSaadi Al-Jebouri to the position of Senior Vice President of LUKOIL Overseas, a subsidiary of the company.Prior to this elevation, Mr. Al-Jebouri was the Executive Director of Dubai Branch of LUKOIL Overseas.

Lukoil says that MrAl-Jebouri has been successfully holding senior management positions in the companies of LUKOIL Group for more than ten years.

Starting from 1998, He was Director of Investment and Finance in London-based office of LUKOIL Europe Holdings Ltd., in 1998. Five years later, in 2003, Gati Al-Jebouri was appointed Chief Finance Officer of LITASCO SA (LUKOIL International Trading and Supply Company), i.e. LUKOIL’s multinational marketing and commercial entity registered in Switzerland. From 2005, he held the position of CEO in LITASCO. From March 2010 till present, Gati Al-Jebouri performed the duties of Executive Director in the operating company in charge of LUKOIL’s strategic West Qurna-2 project.